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PRESIDENTIAL DECREE NO. 1449
PRESIDENTIAL DECREE NO. 1449 -
AMENDING PRESIDENTIAL DECREE NO. 66 DATED NOVEMBER 20, 1972, ENTITLED
"CREATING THE EXPORT PROCESSING ZONE AUTHORITY AND REVISING REPUBLIC
ACT NO. 5490"
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WHEREAS,
there is imperative need to restructure the provisions of Presidential
Decree No. 66 in order to make it more responsive to the requirements
of investments in export processing zones, and to ensure the
effectiveness of the Export Processing Zone Authority in the
performance of its duties and responsibilities and in the attainment of
the national policy enunciated in the law. chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and promulgated the following amendments to Presidential Decree
No. 66 dated November 20, 1972, which are hereby approved, adopted and
made part of the law of the land: chanroblesvirtualawlibrary
Section 1. Section four of Presidential Decree No. 66
is hereby amended by adding two new paragraphs after paragraph (k)
thereof to read as follows:cralaw:red
"Sec. 4. Purpose and Specific Powers. — The purposes
and specific powers of the Authority are as follows:cralaw:red
(l) To invest in, acquire or otherwise deal in real
estate, or any interest therein, as well as in personal property of
every kind and description; and in meritorious cases and upon prior
approval of the National Economic and Development Authority, to grant
loans and advances for the operation or expansion of zone registered
enterprises upon such terms and conditions as the Board may prescribe;chanroblesvirtualawlibrary
(m) By itself or in cooperation with private persons
or entities, to organize, finance, invest in or operate subsidiary
corporations when such an arrangement is necessary to provide utilities
and other amenities which cannot be reasonably provided by existing
entities. All other investments in zone registered enterprises shall
need prior approval of the NEDA."
Section 2. Section five of the same Decree is hereby
amended to read as follows: chanroblesvirtualawlibrary
"Sec. 5. Capitalization. — The capital of the
Authority shall consist of (1) its existing assets and such other
properties as may be contributed to the Authority by the Government to
form part of capital, (2) all capitalized surplus, and (3) cash
contribution by the Government in the amount of one billion pesos,
which is hereby appropriated out of any fund in the National Treasury
not otherwise appropriated, be they collection from any or all taxes
accruing to the general fund or proceeds from loans, the issue of
bonds, treasury bills or notes, or derived from any other sources of
income, by or of the National Government, which amount shall be
programmed and released by the Budget Commission with approval of the
President, in accordance with the schedule of development and
expenditure to be prepared and submitted by the Authority: Provided,
however, That any budgetary outlay allocated and released in favor of
the Export Processing Zone Authority and/or Foreign Trade Zone
Authority shall be correspondingly created to the authorized
capitalization herein provided."
Section 3. Paragraph (d) of Section eleven of the
same Decree is hereby amended to read as follows:cralaw:red
"Sec. 11. Powers and Duties of the Board. — The Board
shall have the following powers and duties:cralaw:red
xxx
xxx
xxx
(d) Upon the recommendation of the Administrator, to
determine the organizational structure, the number, salaries and other
fringe benefits of the officers, employees and consultants of the
Authority and its subsidiaries. As far as practicable, the
remunerations and allowances shall be competitive with rates prevailing
in the private sector as shall be determined by the Board." chanroblesvirtualawlibrary
Section 4. Section eighteen of the same Decree is
hereby amended by adding three new paragraphs after paragraph (f)
thereof and amending paragraph (f) to read as follows:cralaw:red
(f) Exemption from Local Taxes and Licenses. —
Notwithstanding the provisions of law to the contrary, zone registered
enterprises shall, to the extent of their construction, operation or
production inside the zone be exempt from the payment of any and all
local government imposts, fees, licenses or taxes except real estate
taxes which shall be collected by the Municipality responsible for the
collection thereof under the provisions of the Real Property Tax Code:
Provided, That machineries owned by zone registered enterprises which
are actually installed and operated in the Zone for manufacturing,
processing or for industrial purposes shall not be subject to the
payment of real estate taxes for the first three (3) years of operation
of such machineries: Provided, further, That fifty percent of the
proceeds of the real estate taxes collected from all real properties
located in the Zone and such other areas owned or administered by the
Authority shall be remitted to the Authority by the municipality
responsible for the collection of such taxes under the provisions of
the Real Property Tax Code. All real estate taxes accruing to the
Authority as herein provided shall be expended for such community
facilities, utilities and/or services as the Board may determine.
(g) Deduction for Labor Training Expenses. — A
deduction from taxable income of one-half the value of labor training
expenses incurred for upgrading the productivity and efficiency of
unskilled labor shall be granted to a zone registered enterprise:
Provided, That such training program is duly approved by the
appropriate government agency or in the absence thereof by the Board:
Provided, further, That such deduction shall not exceed ten (10%)
percent of the direct labor wage. chanroblesvirtualawlibrary
(h) Deduction for Organizational and Pre-Operating
Expenses. — All capitalized organizational and pre-operating expenses
attributable to the establishment of a zone registered enterprise may
be deducted from its taxable income over a period of not more than ten
(10) years beginning with the month the enterprise indicated the
desired amortization period at the time of the filing of income tax
returns for the first taxable year. For the purpose of this provision,
organizational and pre-operating expenses shall include expenses for
pre-investment studies, start-up costs, cost of initial recruitment and
training and similar expenses.
(i) Tax Credit. — Every registered zone enterprise
shall enjoy a tax credit equivalent to the sales, compensating and
specific taxes and duties on supplies, raw materials and
semi-manufacture products used in the manufacture, processing or
production of it export products and forming part thereof: Provided,
That the tax credit shall accrue to the registered zone enterprise only
after the final product has in fact been exported. The tax credit shall
be used by the Secretary of Finance, upon presentation of the export
documents, and shall be in lieu of refunds. It may be used to pay
taxes, duties, charges and fees due to the national government in
connection with its operations. A tax credit shall be non-transferable,
except when such transfer is by hereditary succession or occurs by
operation of law; it may be used by the person or entity to whom it is
issued only for as long as its enjoys the benefits and incentives
provided for in this Decree; and may not be used so as to result in a
refund."
Section 5. The second paragraph of Section nineteen
of the same Decree is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 19. Power to Issue Bond or Incur Indebtedness.
—.
The total principal domestic indebtedness of the Authority payable in
Philippine currency shall not at any one time exceed seven hundred
fifty million pesos, while the total principal indebtedness of the
Authority payable in foreign currency shall not at any one time exceed
one hundred million United States dollar or the equivalent thereof in
other foreign currencies qualified to form part of the international
reserves of the Central Bank: Provided, That such foreign indebtedness
may be contracted from foreign governments or any public or private
fund sources; and Provided, further, That such borrowing shall be
subject to approval by the President under such rules and regulations
as he may promulgate. The bonds and other instruments of indebtedness
which the Authority is authorized to issue under this section and any
income derived therefrom shall, except those contracted with private
international banking and financial institutions, be exempt from the
payment of all taxes of whatever kind and nature including withholding
taxes imposed by the Republic of the Philippines, its agencies,
instrumentalities or political subdivisions, which fact may be
expressed on the face thereof, and shall be eligible as collateral in
any transaction with the national or any local government, its agencies
and instrumentalities, including government-owned or controlled
corporations and government banking and financial institutions, in
which collateral is required. Any or all loans or instrument of
indebtedness which the Authority is authorized to contract or issue
under this Section shall be unconditionally guaranteed both as to
principal and interest by the Government of the Republic of the
Philippines."
Section 6. Section twenty-three of the same Decree is
hereby amended to read as follows:cralaw:red
"Sec. 23. Eminent Domain. — For the acquisition of
right of way, or for any property for the establishment of export
processing zones, low-cost housing projects, schools, hospitals,
markets, playgrounds and such other facilities and utilities as are
normally required of a modern human settlement, or for the protection
of watershed areas, or for the construction of dams, reservoirs,
wharves, piers, docks, quays, warehouses and other terminal facilities,
structures and approaches thereto, the Authority shall have the right
and power to acquire the same by purchase, by negotiation, or by
condemnation proceedings. Should the Authority elect to exercise the
right of eminent domain, condemnation proceedings shall be maintained
by and in the name of the Authority and it may proceed in the manner
provided by law."
Section 7. Repealing Clause. — All laws, executive
orders, rules and regulations or part thereof inconsistent with this
Decree are hereby repealed and/or modified accordingly. chanroblesvirtualawlibrary
Section 8. Effectivity. — This Decree shall take
effect upon its approval.
DONE in the City of Manila,
this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.
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